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AbstractThe impact of decentralization on ethno‐territorial conflict is widely debated, but empirical analyses of ethno‐territorial party politics are scarce. This paper uses novel data on conflicts in power‐sharing cabinets to explore the relation between decentralization and ethno‐territorial conflicts in the case of Belgium (1979–2006). These data are analysed with the help of poisson and logistic regressions, which confirm the negative association between decentralization and conflict. In addition to institutions, the analyses also examine the relevance of issue saliency, regionalist parties' strength, regionalist cabinet participation, and the proximity of elections. The results contradict the paradox of federalism and add to contemporary debates on ethno‐territorial politics, conflict management, and power‐sharing.